… where my idea of splurging is feeding my cat Fancy Feast. As a full-time student with a limited income stream, follow my journey in obtaining financial awareness and prosperity

I was thrilled to discover yesterday that I’ve reached one of my first financial goals earlier than expected (see My 2007 Goals for Financial Prosperity.) Thanks to diligently socking away between 10-15% of my paycheck and through receiving a portion of my tax refund, (thanks to a free tax prep courtesy of Turbo Tax I managed to get), I’ve finally managed to accumulate a nifty safety buffer of $1,000 in an online savings account.

Since I had absolutely -no- (zero, zip, nada) savings in January, this brings huge relief and a great psychological boost. A $1,000 savings over the span of three months definitely feels empowering!

But consider this sobering fact; the nation’s savings rate was at a negative 1 percent last year. The savings rate has fallen to the lowest level since the Great Depression. Ouch.

So why aren’t more people motivated to save?

You don’t need to be filthy rich to begin building wealth

Many people are under the assumption that saving a little isn’t worthwhile in the long term. But putting a bit of money away now can actually go a long way in preparing for those pesky unexpected expenses and emergencies, buying a home, or even funding a comfy retirement.

The key is learning how to most effectively make your money work for you.

By getting into the healthy habit now of nurturing and respecting every dollar that passes through your fingers, you’ll soon be reaping the wonderful fruits of your labor. Saving a mere $5 a day can dramatically change your life over time.

Consider putting $5 per day in an account yielding a 10-percent annual return. After 40 years, that $150 a month (roughly) can transform into an enormous $940,000.

So in what ways have I been saving money without feeling as if I’m sacrificing too much?

I always pay myself first. I transfer between 10-15% of my paycheck into savings as soon as I receive it, instead of waiting at the end of the month when it may have all dwindled away. This has become so habitual that I never notice the difference.

By bringing my own snacks and lunch to work, I easily save up to $3 per day. I also eat enough to feel satiated and try to avoid over binging on food. This also helps alleviate that gross “I’m stuffed” feeling after completely pigging out on a meal.

At the end of each day, I throw all of my change into a jar in my room. By the end of the month, that change easily morphs into an unexpected $30-$40.

I love walking and hiking and can easily absorb myself in nature for hours at a time. All I need to bring on my journey is a thermos filled with water, some small healthy snacks for endurance, and my favorite book from the library for stretching out for a bit in the sun. Long walks are both physically and spiritually healthy, and they don’t cost a thing!

Do you have your own favorite saving tips and activities? I’d love to hear them!

~†~ Baby Steps are Key ~†~

If you learn how to nurture and take care of your money now, down the road your money will, in turn, take care of you.

Very good advice–you can also start buying stocks and similar equities with very little money. There’s a number of online brokerage firms that don’t require any minimum deposit amount to open. I use a company called FirstTrade though there are plenty of others.

If you don’t have enough to devote to a dedicated brokerage account there’s also an outfit called Sharebuilder (www.sharebuilder.com) which will let you start with as little as $4 and buy fractional shares of stock. I’ve known people who’ve used them before and have been pretty happy with them, though if you’ve got a decent amount of money (say $500 or more) to invest I’d recommend a dedicated brokerage since its cheaper and will offer more investment options…

[...] Surviving Paycheck to Paycheck? You Can Still Start Saving “I can’t afford it!” is nothing more than an excuse to start saving. There are so many ways to trim fat from your budget that you can afford it. (@ brokeass student) [...]

Excellent advices! It’s true, you can easily save money even if you’re not rich (yet) and it gets more and more important the more money you make!

I usually spend time playing guitar or working online, of course buying a new guitar can be quite expensive, but after the initial purchase it cost roughly 30$ a month (strings, picks, cables) and that’s it!

And bringing your own lunch at work also helps (unless you work from home).

I do the exact same thing as you, at the end of the day all my pocket change goes into a jar, and it can take as much as 4-5 months before i check that jar. But when i do i usually have a nice 300-350$ to spend on something or save for later! Like you said, even 5 bucks a day is good!

Nice Article, I do something similiar with my high-interest savings account. I have it setup to automatically withdraw a set amount every two weeks (which I calculated out to be about 10% of my pay checks as well). This way I do not forget or can not make excuses for putting a little a side, I just treat it as another bill.

I like your first three tips, and I’m really trying to do the second one. I like soup and sandwiches, but buying them at Subway every day for lunch is the best act of frugality. I could easily save $3 to $5 every day by bringing my lunch to work.

For the third tip, I do my own variation. I haven’t used a credit card in years and I don’t like carrying cash, so I use my debit/check card for purchases. My bank, Bank of America, has a nifty feature where they round up my purchases to the nearest dollar and put the rounded amount into my savings account. They even match a portion of what I put in. Nothing beats free money!

[...] Student and asked if I could do an interview with her. Recently at her blog she has talked about saving money, even if you live paycheck to paycheck. As she’ll mention, she hasn’t blogged in a [...]

That’s pretty scary that the average family is spending every dime they make (and more) like that! I suppose a lot of it has to do with this mentality of maxing out credit cards without mind to the future…

Congratulations! I have 10% of my paycheck automatically invested in company stock and the company matches 50% of what I put in it. (I can put up to 2k per year, so I put in 2k and end up with 3k). I do have a problem keeping money in my money market account :/ I continue to buy stock in different companies once my balance hits between $500 – $1k, which is I know isn’t the best thing

I also transfer 25% a month to my money market account, which is only like $250 (I live with my parents still trying to work my way up in the company)

Once again GREAT JOB and I encourage you to double that to 2k in 3 months or invest in some stock.

i’m 52 and i’ve been doing all the things you suggested for years. another tip is make your coffee at home and bring it with you . eg 2 dollars a day for coffee at 7/11 or some other place times 365= $730.00 a year for morning boost

I’m just wondering, my fiancee and I just opened a savings account at ING, and the APY is 1.4%. We’ve heard it was a good idea, but, we’re just getting into the personal finance world hardcore. I’ve made terrrrrible financial mistakes (which we seem to have in common based on your blog!) and we are trying to fix them. Where in the world would I find any kind of savings account with a 10% return? I feel like no one has one higher (for a regular savings account, not including MMs or CDs) than 3%.